The European Commission, the EU's executive arm, said Wednesday that tax deals granted to Starbucks in the Netherlands and Fiat in Luxembourg amounted to illegal state subsidies that must be repaid.

The commission ordered Luxembourg and the Netherlands to recover the unpaid tax from Fiat and Starbucks, which it said amounts to EUR20 million to EUR30 million ($22.6 million to $34 million) for each company. The companies can no longer continue to benefit from the advantageous tax treatment granted by these tax rulings, the commission said.

The two tax deals "endorsed artificial and complex methods to establish taxable profits for the companies" that "do not reflect economic reality, " the commission said in a statement.

As a result of the deals, most of the profits of Starbucks' Dutch coffee-roasting company "are shifted abroad, where they are also not taxed," while Fiat's financing company in Luxembourg "only paid taxes on underestimated profits," the commission said.